 The State of California has reached a deal with Uber and Lyft to allow rideshare drivers to unionize. As part of the deal, the two companies will support AB 1340, which creates a framework for drivers to unionize. In exchange, California’s legislators will back a measure sponsored by Uber and Lyft to cut insurance requirements for their drivers.
AB 1340 allows unions to trigger an election by presenting proof that at least 10% of active drivers support the union. If 30% of drivers vote in favor of unionizing, the state will automatically certify the union. Notably, AB 1340 does not reclassify rideshare drivers as employees, a goal of labor advocates. Instead, drivers will keep their independent contractor classification, depriving them of minimum wage protections and workers compensations insurance, among other employee protections. The bill is now headed to Governor Gavin Newsom’s desk, and he is expected to sign. The deal could mark the end of years of litigation over the employee status of rideshare drivers. In 2018, the California Supreme Court handed down a ruling making it easier for workers to prove they were misclassified as independent contractors. California then passed a law codifying the Supreme Court’s ruling. But in 2020, voters then passed Prop 22, a ballot initiative funded by Uber and Lyft to classify drivers as independent contractors. In return for supporting the union deal, California’s State Senate President, Mike McGuire, and California Assembly Speaker, Robert Rivas, agreed to back Senate Bill 371, a measure that cuts insurance obligations for rideshare drivers from $1 million to $60,000 per driver, making service cheaper. Lauren Teukolsky has represented workers for over two decades and her commentary on the latest developments in employment law is regularly featured by major publications such as Bloomberg Law, Law360, Law.com, and the Los Angeles Times. If you would like to speak with her about a wage-and-hour matter, click here.
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Legal Dive quoted Lauren Teukolsky last week in an article discussing the Department of Labor’s (DOL) new independent contractor rule. The long-awaited rule was released on January 9th and replaces the DOL’s Trump-era guidance as to employee and independent contractor classification.
The issue of classification has become especially important over the past five to ten years as the American “gig economy” has taken off. With the rise of companies such as Uber and DoorDash, more employers are utilizing workforces that consist of independent contractors. From employers’ perspectives, the development is positive, as it allows them to avoid expenses associated with employees, such as worker’s comp insurance. For employees, however, failure by their employers to properly classify them as employees frequently means a denial of basic workplace rights such as minimum wage, overtime, and paid leave. The DOL’s new rule seeks to reduce the risk that employees are misclassified as independent contractors by instituting provisions it believes are more consistent with judicial precedent than those previously put in place during the Trump administration. Legal Dive’s article begins with commentary from Ms. Teukolsky on how corporations may need to navigate the new rule, which is set to go into effect on March 11: “’You need to assume that most of your workers are employees, unless it’s pretty clear that they’re not, and not the other way around,’ said Lauren Teukolsky, who represents workers at Teukolsky Law. ‘It’s definitely the safest course.’” Ms. Teukolsky also commented that the Trump-era rule deviated from longstanding employment-law principles, and the DOL’s new rule represents a return to the well-established legal principles that existed for decades. To read Legal Dive’s article in its entirety, click here. To learn more about Ms. Teukolsky and Teukolsky Law, click here. On Monday, the Ninth Circuit handed gig workers a win, invalidating a ruling that a Grubhub driver should be classified as an independent contractor. The Court ruled that the lower court must look at the case again because the California Supreme Court has now held that the Dynamex “ABC” test applies retroactively. Under the ABC test, a worker is presumed to be an employee unless the employer can prove that the worker: (A) was not subject to the employer’s control, (B) provided services outside of the employer’s usual course of business, and (C) did not have their own independent business.
The three-judge appellate panel remanded to the district court to apply the ABC test to plaintiff Raef Lawson’s minimum wage and overtime claims. The panel rejected Grubhub’s argument that Prop 22, which was passed last year and allows some app-based drivers to be classified as independent contractors, applies retroactively. “We conclude without difficulty that Proposition 22 does not apply retroactively,” the Court wrote. The panel also rejected Grubhub’s argument that Prop 22 somehow “abates” or nullifies wage claims that accrued before Prop 22 went into effect. This is the first time a court has ruled that Prop 22 is not retroactive, and that Prop 22 does not abate previously-existing wage claims. On remand, the lower court must determine whether Lawson is an employee under the ABC test, and also whether Lawson is exempt from the ABC test under one of the exemptions provided for by AB5, the landmark legislation that codified the ABC test after Dynamex was decided. The AB5 exemptions are retroactive. We will be following this case closely to see if the lower court will find that Lawson is an employee or an independent contractor. If you believe you have been misclassified as an independent contractor, contact Teukolsky Law today for a free consultation. As Prop 22 goes into effect in California, workers and unions are already fighting back against the measure, which was largely propped up by tech giants’ $200 million “Yes on 22” campaign.
Several drivers and SEIU filed a petition in California Supreme Court on January 12, 2021 seeking to overturn the new ballot measure, which aims to permanently classify gig workers as independent contractors instead of employees. The drivers and union allege that Prop 22 violates California’s constitution and are asking the Court to invalidate the new law, arguing that Prop 22 makes it too difficult for state legislators to implement workers’ compensation. On February 3, the Court declined to hear the suit 5-2. However, the Court said the case could be refiled in a lower court. On February 11, the drivers and union filed a similar suit in Alameda County Superior Court. Prop 22’s destructive effects are being felt by workers statewide. The Knock LA reported last month that Vons, Pavilions, and other stores owned by Albertsons Companies in California plan to fire grocery delivery drivers later this month and will shift to a third-party delivery service that uses independent contractors. Drivers working for Albertsons Companies are currently classified as employees; the company’s Bay Area drivers are unionized and will not be affected by the change, but delivery drivers in Southern California not protected by a union lack the power to fight back against this move by the grocery stores. If you believe you have been misclassified as an independent contractor instead of an employee, contact Teukolsky Law today for a free consultation. |
AuthorLauren Teukolsky is the founder and owner of Teukolsky Law, A Professional Corporation. Archives
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Teukolsky Law, A Professional Corporation, represents clients throughout California. Ms. Teukolsky is admitted to practice in the State of California, as well as the United States Supreme Court, Ninth Circuit Court of Appeals, Northern District of California and Central District of California. Disclaimer.
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Copyright © 2017